Contradictory point in 44AD and 44AB

if profit is less than 8% or turnover exceed 2 crore.... Audit is compulsory, if any one of condition fulfilled

Even if Mr. A is a regular taxpayer but not a taxpayer under Presumptive taxation scheme?

Look, the two sections are to be read in conjunction with each other.
While 44AB specifies that audit is mandatory wherever turnover exceeds Rs. 1 crore, 44AD specifies that even those who have turnovers between Rs 1 to 2 crores can also opt for presumptive income if they are willing to declare a presumptive income @ 8% or 6% as the case may be. Meaning if your turnover is say Rs. 1.50 crores, section 44AB would still not apply to you if you have declared an income of 8%/6%.
Conversely, if your net income is far less than 8%, you need to get your books audited u/s 44AD read with 44AB.
In case your turnover exceeds Rs. 2 crores, audit is mandatory even though your net income is much more than 8%.

Yes... I agreed to above said replies... 🙏🙏🙏


@ Yashi Bansal.,

Yes...
If a Taxpayer show his profit less than 8 percentage except u/s 44ab then his accounts will fall under Tax Audit...
In case the Taxpayer is individual and th profit is BEL then not required Tax Audit...


As per my view Difference between 44AA and 44AD...

44ad : Depreciation not allowed and If partnership firm then Interest and remuneration is not allowed...

44aa : Depreciation will be allowed and if partnership firm then Remuneration and Interest is allowed...


But, Both sec related condition same as shown profit 8 percentage or above 8percentage...

@ CA RAVI SHANKAR SISTLA and @ RAJA PM, I completely agree to both of your replies but my query is regarding one whose turnover is below threshold if Rs 1 crore say 80 lakhs and also a regular tax payer without paying taxes under Presumptive scheme and his books of account shows profit @ 5.5%. Will he still b liable for tax audit?

No. If he does not opt for presumptive taxation u/s 44AD, he need not get his books audited even if the income is below 8%.

Many may not agree with this view. But if you carefully observe, the words used in FAQ issued by Income tax department, it uses the word 'willingness' with respect to 44AD.

Hence in my view, 44AD is an option, not compulsory. If you do not opt for it, the provisions of the same is not applicable.

Where the turnover is less than 80 lakhs and the net profit is less than 8%, tax audit is COMPULSORY notwithstanding the fact that the assessee maintains complete set of books of account.

I also completely agree with Mr Ravi Shankar Sistla. 

CA Saitsh Nemani

I also completely agree with Mr Ravi Shankar Sistla. 

CA Saitsh Nemani

@ Satish kumar nemani and @ ca ravi shankar-
Where it has been quoted in IT Act?

Mr Ajit Hegde

Kindly read the section 44AD(1) of the Income Tax Act, 1961. I have not read FAQ but the provisions of the Act shall prevail and binding on the assessee. 

Originally posted by : Ajit Hegde
	No. If he does not opt for presumptive taxation u/s 44AD, he need not get his books audited even if the income is below 8%. Many may not agree with this view. But if you carefully observe, the words used in FAQ issued by Income tax department, it uses the word 'willingness' with respect to 44AD. Hence in my view, 44AD is an option, not compulsory. If you do not opt for it, the provisions of the same is not applicable.

Have you filed any return of any assessee having business income(not commission agent) and showing NP less than 8%/6%  of turnover last year? Is  the return cleared without any defect?